The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) on Monday decided to maintain the policy rate at 11%, in line with market expectations.
The committee’s decision follows the previous meeting on July 30, 2025, when the rate was also held at 11% due to rising energy costs and inflationary pressures. Analysts noted that recent floods may increase food prices and overall inflation, justifying the cautious stance.
A survey by Topline Securities showed that 72% of participants anticipated no change in the policy rate, while Arif Habib Limited cited potential inflationary pressures, fiscal concerns, and risks to the current account as reasons for maintaining the rate.
Since the last MPC meeting, the rupee appreciated by 0.5%, petrol prices fell 3%, and international oil prices dropped nearly 10% to around $63 per barrel.
Pakistan’s headline inflation eased to 3% YoY in August 2025 from 4.1% in July, while the current account posted a $254 million deficit in July, following a $328 million surplus in June.
SBP’s foreign exchange reserves rose by $34 million to $14.34 billion as of September 5, 2025, with total liquid reserves at $19.68 billion and net reserves held by commercial banks at $5.34 billion.
